New TD Demand Line

First off I would like to thank those folks who have been commenting on the blog lately. It is a pleasure to have their inputs and ideas since it is; in my opinion, still rather difficult to find good “DeMark” work on the web. Thanks!

As for the daily cash S&P500 I have to laugh (LOL). After all the bluster and all my frantic writing the index has done, overall, nothing this week. Yes, yesterday was a down trending bar - the first since August 17 - but we didn’t make much downside progress.

We did open above 1026.61 and then trade below that level, and so the TD REI POQ triggered a “sell”. We are also operating off an RSI “sell” signal and a completed TD Sequential countdown. Indeed; I now think that the Level 1 Alpha pulse that moved the market upward from the August 17 low is certainly done. Surely we are now in the downward moving Beta pulse -- and so I think that today and tomorrow are critical to the bear case. The longer in time that Beta lasts the higher the odds that the next upward pulse, Delta, will fail to make a new high. Of course that is the definition of a downtrend - lower highs.

I still think the odds of a decline below the 978 level here are minimal at best. The best part of yesterday’s price action is that it allowed the supply and demand balance to readjust. The new TD Supply Line is essentially horizontal at Tuesday’s 1037.75 high. I would let a break of that level end the bear hopes here. Otherwise, a close today below 1026.13 would cause a four day “price flip” and increase the downward pressure. My first downside target is around 1009 where the short moving average is.

Bottom Line: I remain short-term bearish here but still expect an eventual resumption of the rally that takes us past the Equinox in time. I would re-think my short term bearish view on a break of the TD supply line.